Question

Describe the three functions of Money?

Answer 1

• Medium of Exchange

Money serves as a medium of exchange for purchasing goods and services in an economy. Sellers use this money to purcahse thing they want to and this circulates withing the economy.

• A measure of value

It helps in the identification anbd measurement of value of different goods and services. This helps to compare and asses goods and sercies which may not have any commonality.

• A store of value.

People save money because thy have a trust on the liquididty of money . This actually makes people save and be confident that the value can be redemmed in the future.

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